706 - Spidell


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This topic contains 3 replies, has 4 voices, and was last updated by Larry Pon 2 months, 1 week ago.

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  • #165716

    Can a 706 have a fiscal year?  Client died 8-18.  I believe tax return was due in May..but can we chose a fiscal year and avoid paying late filing penalties?

  • #165721
    Lynn Freer

    No the 706 is filed based on the calendar year.

  • #165725
    Peter Muffoletto

    <div id=”b_content”><main aria-label=”Search Results”>

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      <h2 class=” b_entityTitle”>Estate tax return due date</h2>
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      <div class=”rwrl rwrl_sec rwrl_padref rwrl_hastitle”> Generally, the estate tax return is due nine months after the date of death. A six month extension is available if requested prior to the due date and the estimated correct amount of tax is paid before the due date.</div>
      <div>Unless you filed an extension the 706 is now late, and unfortunately a number of elections have been lost. hopefully the extension was filed.</div>
      <div>As to Lynn Freer’s response she was probably thinking of the 1041, and 541, not the 706.</div>


  • #165825
    Larry Pon

    The 706 is the Estate Tax Return and it is not an annually filed tax return.   The Form 706 is due within 9 months of death.   The current  exemption is $11,400,000.   Most of our clients are below that amount, but you will want to file a Form 706 if your client was married.  You need to file a Form 706 to take advantage of the Deceased Spouse Unused Exemption Amount (DSUEA).   This is known as Portability which means the surviving spouse will have an extra $11.4 million exemption.

    If there is income, the estate may need to file a Form 1041.    The trustee can make a §645 Election to elect a fiscal year.   Trusts are generally calendar year.   There are a lot of advantages to consider a fiscal year.